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Q 1 Functional budgets preparation Marble Ltd manufactures two products and is in the process of preparing its budgets for the next quarter ( April
Q Functional budgets preparation Marble Ltd manufactures two products and is in the process of preparing its budgets for the next quarter April May and June To date the following budgeted information has been compiled: tableProduct ABudgeted sales unitsAprilMayJuneJuly Budgeted selling price per unit: of sales are on credit. Credit terms are strictly days. of all sales will result in bad debt. Trade receivables outstanding at March were which are all collectable The standard material for each product is as follows: Product A Material X kilogrammes Material planner has provided the following information: tableMaterial X Product AOpening inventory April unitsClosing inventory JunePurchase price per kilogramme All purchases are paid in the same month to the supplier. Management have decided closing stock at the end of each month should be as follows: Raw materials: of the next month's usage Finished goods: of the next month's sales. Overheads Fixed overheads are estimated at per month and are paid in the month they were incurred. of this amount relates to depreciation. Insurance of is due to be paid in April. Capital Expenditure April: Computer May: Delivery van June: Additional Delivery van Corporation Tax of is due to be paid in May The opening bank balance is overdrawn. Required: i Prepare the following budgets for April, May and June: a Sales Budget b Production Budget in units c Materials Usage Budget d Materials Purchases Budget ii Prepare the Cash Budget for the months period. iii. Recommend to the management of Marble ltd three ways of improving their cash position.
Q Functional budgets preparation
Marble Ltd manufactures two products and is in the process of preparing its budgets for the next quarter April May and June To date the following budgeted information has been compiled:
tableProduct ABudgeted sales unitsAprilMayJuneJuly
Budgeted selling price per unit:
of sales are on credit. Credit terms are strictly days. of all sales will result in bad debt. Trade receivables outstanding at March were which are all collectable
The standard material for each product is as follows:
Product A
Material X kilogrammes
Material planner has provided the following information:
tableMaterial X Product AOpening inventory April unitsClosing inventory JunePurchase price per kilogramme
All purchases are paid in the same month to the supplier. Management have decided closing stock at the end of each month should be as follows:
Raw materials: of the next month's usage
Finished goods: of the next month's sales.
Overheads
Fixed overheads are estimated at per month and are paid in the month they were incurred. of this amount relates to depreciation.
Insurance of is due to be paid in April.
Capital Expenditure
April: Computer
May: Delivery van
June: Additional Delivery van
Corporation Tax of is due to be paid in May
The opening bank balance is overdrawn.
Required:
i Prepare the following budgets for April, May and June:
a Sales Budget
b Production Budget in units
c Materials Usage Budget
d Materials Purchases Budget
ii Prepare the Cash Budget for the months period.
iii. Recommend to the management of Marble ltd three ways of improving their cash position.
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